Vending machines not just for chips anymore

The vending industry has come a long way since the days when you cranked a handle to get a six-and-a-half ounce bottle of Coca Cola for a nickel.

Steve Tarter

The vending industry has come a long way since the days when you cranked a handle to get a six-and-a-half ounce bottle of Coca Cola for a nickel.

Today's machines offer a broad range of choices in snacks, beverages and meal items that cost a lot more than a nickel. These growing choices reflect consumer interest for food and drink at school, work or on the go, say industry officials.

Two vending machines that date from the 1940s are on display at the front office of the Canteen Corp. in East Peoria, where district general manager Robert Hall said despite all this growth, the billion-dollar industry is still built 'on nickels and dimes.'

'We sell convenience, and we're cheaper than a convenient store and we're in your break room,' he said of the ubiquitous machines.

The new look in vending these days is a glass-front machine where all choices are in full view, said Hall. 'We put 150 of these machines in the Peoria area last year,' he said.

One of the biggest items going in those glass-fronted machines are non-carbonated beverages — bottled water, energy drinks and iced tea — that now outsell carbonated favorites such as Coke and Pepsi in the Peoria area, said Hall.

'We're seeing more water and tea drinks. Now there's G2, a low-calorie Gatorade. Energy drinks are booming. Kids pay $3 for something with a skateboarder on the label,' he said.

Mike Wallace, the owner of HOI Vending in Peoria, said healthy snacks are on the rise but don't outsell candy and chips. After 30 years in the vending business, Wallace has seen plenty of changes. One that's streamlined operations is the ability to track machines from afar, thanks to high-tech monitoring systems. 'We have computer programs that show you what a specific machine has in it,' he said.

While heavily competitive, the vending industry is seeing fewer 'Mom and Pop operations,' said Wallace, whose territory extends to a 100-mile radius from Peoria.

With productivity demands that more workers spend more time on the job site, a greater number of employees eat meals dispensed by vending machines, he said. 'We're seeing a demand for more meal things — more frozen entrees along with fresh food. They like fresh sandwiches brought in every day,' said Wallace.

Coffee is also a hot item when it comes to the vending business, he said. 'There's more of a demand for flavored coffees,' said Wallace.

Coffee has gotten so big that Canteen, a national vending firm, based in Charlotte, N.C., started its own coffee brand. 'We bought our own roasting company in Iowa,' said Hall, pointing to a new machine that dispenses premium coffee for $1 a cup.

At Joe Abraham & Sons Amusements and Vending, coffee is also a big part of the business. 'We provide both a coffee pot service as well as vending machine coffee,' said sales manager Ted Arndt.

The Abraham company, long known for providing pinball and video games, has only been in the vending machine business for the past four years, said assistant general manager Joe Abraham.

'We let businesses pretty well choose what they want in their machines,' said Arndt. Factories tend to want plenty of fresh-food items, a risky choice in the vending mix.

'You've got a 10 to 14-day shelf life, but you've got to have them,' he said.

The problem with meal items like sandwiches is the narrow window for sales, said Arndt. 'If you don't turn the product, you throw it away,' he said.

'Those food machines are the toughest machines we do,' said Canteen's Hall. 'You might sell 200 sandwiches one week and 100 the next. It's the one machine we don't always fill up completely — unlike soda where we just load it in,' he said.

With 2,000 vending machines across the Peoria area — 900 of them at Caterpillar Inc. facilities — Canteen puts a lot of responsibility in the hands of employees, said Hall.

'I don't like calling them route drivers,' said Hall of workers that make the rounds servicing the company's machines. 'I consider them retail vending specialists.'

Just more than two months ago, Canteen's specialists went from being paid on an hourly basis to working on commission.

'They're working faster and smarter. Ninety-five percent are making more money,' said Hall.

Canteen employees receive extensive training when they start, he said. In fact, they have to pass a test after that training period.

'If they don't pass, they go back into training,' said Hall.

As choices grow and food prices continue to rise, credit card readers will be part of the next generation of vending machines, he said.

'We've got several systems now that allow you to pay with a debit card — at Bradley University and some area prisons,' said Hall.

'The problem is now that you can't get a credit card reader and bill changer on the same machine. When that becomes available, it's going to be huge,' he said.